CTP Cash Flow Management & Liquidity Solutions Flashcards
6 cards from real CTP practice questions. Tap to flip, then mark Knew It or Still Learning — missed cards come back until you master them.
Read the first 6 CTP Cash Flow Management & Liquidity Solutions flashcards as text
What is the primary purpose of a 13-week cash flow forecast in a turnaround situation?
Answer: To monitor near-term liquidity and identify cash shortfalls
A 13-week cash flow forecast provides a short-term view of liquidity to identify and address cash gaps before they become critical.
Which term describes a court-approved arrangement permitting a debtor to use a secured lender's collateral cash during Chapter 11 proceedings?
Answer: Cash collateral order
A cash collateral order is a court-approved arrangement permitting a debtor to use a secured lender's cash collateral during Chapter 11 proceedings.
What does 'burn rate' measure in a liquidity analysis?
Answer: The pace at which a company is depleting its cash reserves
Burn rate measures how quickly a company is spending its available cash, which is critical for determining how long it can sustain operations.
In a turnaround, accelerating accounts receivable collections is primarily aimed at:
Answer: Generating immediate cash inflows
Accelerating collections converts outstanding receivables into cash faster, directly improving liquidity in a distressed situation.
What is 'stretching payables' in cash flow management?
Answer: Delaying payments to vendors beyond standard terms to conserve cash
Stretching payables involves extending the time before paying vendors, preserving cash in the short term but potentially damaging supplier relationships.
Which liquidity metric compares current assets to current liabilities to assess short-term solvency?
Answer: Current ratio
The current ratio (current assets ÷ current liabilities) measures a company's ability to pay short-term obligations with its short-term assets.